Making the right call with your Vodafone shares

I have just 481 Vodafone shares and wish to sell. I am wading through forms. I have signed blue and yellow, not clear about white. Can you help? I assume I select 2 on white to receive capital payment. Am I correct? Ms A.K., email

Forgive me if the answers to queries this week is briefer than usual but there is, not surprisingly, a massive and growing postbag on the Vodafone/Verizon issue.

Before everyone gets too worried about the impending deadline, bear in mind that the only forms that need to be returned this week are the blue and yellow forms you will have received with your “information pack”. These refer only to casting your votes by proxy (ie in your absence, assuming you will not make the special shareholders’ meeting called to vote on the Verizon deal on January 28th in London).

If you have not yet returned these, you might be best advised to indicate your proxy online.

The other (white) forms indicating how you wish to receive your “return of value” payment and whether you want to use the free share-dealing facility to sell the Verizon shares you will receive do not have to be returned until February 20th and April 4th respectively.

In your particular case, there is no real urgency because you have completed the blue and yellow forms indicating how you want to vote on the substantive issue – the sale by Vodafone of its US interest in the joint venture with Verizon.

As you say, there are plenty of forms to wade through and enough accompanying information to confuse anyone but a lawyer or a specialist in share dealings.

There are two separate white forms – a “Form of Election: Return of Value 2014” and a “Dealing Form”. Although they are attached, they can and (to avoid confusion) should be separated by tearing along the dotted line.

The form you are referring to is the form of election, which contains five distinct sections.

Section 1 asks what currency you wish to receive your payment in. The default for shareholders with an address in the Republic is euro, while those in Northern Ireland will default to sterling. Unless your circumstances are out of the ordinary, you do not have to place an X in any box here as the default will apply. If you wish to adopt a “belt and braces” approach, mark the euro box (the second of the three options in section 1) with an X.

Section 2 is the all-important selection of income or capital options. The default is income. For almost all Irish shareholders – and certainly for anyone with a holding like yours – the most tax efficient option is capital and you should place an X in that box. Failure to do so will see your windfall paid as income and most likely see you incur an unnecessary tax bill.

Capital is the best option because, as Revenue have indicated in their provisional guidance on the transaction, you will be incurring a capital loss and therefore will have no tax to pay.

Section 3 is a matter of choice. If you wish to hold your own share certificate, place an X in the box; otherwise Computershare will hold your new Vodafone shares in a Vodafone share account.

Section 4a is critically important. Fail to complete this correctly and the whole form is void. Everyone who is named on the shares to which the form refers must sign. This is particularly relevant for those many people who acquired Eircom shares for both themselves and their children. In the case of their children’s holding – unless changed since as the children became adults – both one parent and the child will be named on the particular shareholding. In that case, both must sign – there is no alternative.

Ignore Section 4b unless you hold your shares through a company.

Section 5 is not obligatory but allows you to provide Vodafone with an email address. If you do so, the company can subsequently use that address to contact you in relation to your shareholding so consider if that is what you want, or whether you are likely to monitor or change your email address.

One last thing – use an X, not a tick in filling the boxes. That’s what they ask for and share registrars can be picky about these things. You wouldn’t want to face a tax bill for such a simple error!

Capital and income options

I am an elderly pensioner holding 350 Vodafone shares. The documentation issued to shareholders is a bit confusing regarding capital and income options.

Capital seems to be about capital gains and income about income tax. I don’t understand the difference. Which do you suggest I should go for?

The “form of election document” would appear to suggest I must indicate which option I want to take and they want these forms returned pretty soon.

Mr P.Ó C., email

If you want to receive the capital option, you do need to indicate that at Section 2 on the form of election: if your preference is for the income option, you need do nothing as that is the default for anyone with your shareholding.

Income means the cash element of the windfall will be paid as a dividend and will be subject to income tax if you are over the income tax threshold (or if this payment brings you over it).

Capital means the cash is subject to capital gains tax. Though the CGT rate is higher, the Revenue Commissioners have noted in provisional guidance they have issued that those who acquired their shares in the original Eircom flotation will have no tax bill under this option as they are still at a loss on the shareholding and, more particularly, on this transaction.

Don’t panic about returning the form. The form of election does not need to be returned for a month yet (February 20th is the deadline). As stated above, the only urgency is with the blue and yellow voting proxy forms.

Is there a form to sell shares?

In relation to the Vodafone/ Verizon thing, are there forms to be completed to sell those shares if so where does one get them?

Ms M.C., email

Yikes, you’re a little bit late in this. There are certainly forms to fill – four of them. While the one relating to selling the Verizon shares does not have to be returned until April 4th, the blue and yellow forms relating to the shareholder vote on the deal are due next Sunday – ahead of Tuesday’s shareholder meeting.

At this stage, I suggest you fill these in online. First, however, you will need to contact the Vodafone helpline on 01 6968421 to find out how to get a) a control number and b) a PIN. You should also have to hand your SRN (the shareholder reference number). If not, you need to talk to them about that too.

If they cannot help with all the details, they might send you on to Computershare, the company’s share registrar.

Once you have those three bits of information, you can log on to www.vodafone.com/generalmeeting. First you need to scroll down and click “Accept” on the “Important Legal Information” page. Then you should select the “Vote Online” link. You will need to do this separately for the court meeting and general meeting. Note that each has a separate control number but the same PIN. Obviously your SRN (which appears on any shareholder communication from the company) is also the same for each form.

When you are talking to the Vodafone helpline, you might ask them to send you the information pack, including the white forms to allow you choose how you want to receive your payment and whether you want to sell your Verizon shares immediately without paying commission.

If you have not already received that pack, I can only assume Vodafone and/or Computershare has an out-of-date address for you. You should update your mailing details (or email alternative) when you are talking to them.

If you are looking to sell the underlying Vodafone shares, we’ll come back to that in the coming weeks.

My ‘SRN’ won’t work

Like many, I bought Eircom shares at Mary O’Rourke’s behest and have seen them mutate into Vodafone shares somehow. I get dividends. I now wish to sell but when trying to sell them through Computershare, I inserted my “SRN”. It was not recognised. I cannot send this query to them as a valid SRN is required.

Can you advise ? I have no knowledge of shares and/or interest in them

Mr M.P., Dublin

The SRN is the unique shareholder reference number for each shareholder on a company’s share register. You will have a different SRN for every company in which you own shares.

If your SRN is not recognised, I suggest you contact Computershare at 01 4475566.

I have always found them very helpful, though, clearly, they will need to satisfy themselves that you are who you say you are before issuing your SRN details.

That could entail you providing some information, documents or supporting evidence including evidence of address.

Please send your queries to Dominic Coyle, Q&A, The Irish Times, 24-28 Tara St, Dublin 2 or email to dcoyle@irish-times.ie. This column is a reader service and is not intended to replace professional advice.

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